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Pricing for commercial property/casualty lines continued to firm during the first quarter, the seventh consecutive quarter of premium increases, according to The Council of Insurance Agents & Brokers’ Commercial Property/Casualty Market Index Survey released Friday.
Accounts of all sizes experienced rate increases in the first quarter with an average increase of 3.5%, compared with a 2.4% increase in the fourth quarter of 2018, according to a statement issued with the survey.
Premiums increased for all lines of business except workers compensation, with commercial auto and commercial property experiencing the largest hikes, the survey said.
Commercial auto saw increases of 8.8%, its 31st consecutive quarter of premium increases, as it continued to experience runaway premiums and “out of control” claims, the survey said.
This was the highest rate increase for commercial auto since the third quarter of 2011, CIAB said.
Commercial property also saw a “noticeable contraction” and a 5.9% increase in prices driven by repeated natural catastrophe losses that have resulted in insurers taking a more cautious approach to underwriting, the survey said.
Umbrella saw increases of 3.3%, CIAB said, while workers compensation was the only line that saw a quarterly decline, with rates down 3.3%.
The survey also showed that interest in cyber coverage remained consistently high between the fourth quarter of 2018 and the first quarter of 2019, with 75% of respondents saying they had seen “somewhat or significant increase” in demand, the survey said.
Survey respondents said that driving organic growth and recruiting and developing talent were the top two priorities and top challenges for their firms, according to the survey.
On the client side, cyber risk and future premium increases remained top client concerns, the survey said.
“A confluence of factors and market dynamics illustrate a new story where companies now examine each line of business and make analytical, data-driven decisions. It is a transitioning market with a keen emphasis on new mechanisms to achieve profitable underwriting and improve loss ratios,” said Ken A. Crerar, president and CEO of The Council.
The outlook for the commercial auto liability segment remains negative as challenges persist despite some progress made by insurers, Guy Carpenter & Co. LLC said in a report sent to clients and shared with Business Insurance on Thursday.